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Luminara Worldwide, LLC v. Raz Imports, Inc.

United States District Court, D. Minnesota

November 15, 2016

Luminara Worldwide, LLC, Plaintiff,
RAZ Imports, Inc. et al., Defendants.

          Courtland C. Merrill, Daniel R. Hall, Joseph W. Anthony, Cory D. Olson, Steven C. Kerbaugh, and Steven M. Pincus, Anthony Ostlund Baer & Louwagie P.A., for Plaintiff.

          Alan G. Carlson, Jonathan D. Carpenter, Peter Kohlhepp, Tara C. Norgard, Carlson Caspers Vandenburgh Lindquist & Schuman P.A., Joseph P. Reid, Patrick J. McKeever, Thomas N. Millikan, Perkins Coie LLP, and Laura J. Borst, Norton Rose Fulbright U.S. LLP, for Defendants.


          SUSAN RICHARD NELSON United States District Judge.


         This matter comes before the Court on the parties'[1] cross-objections to Magistrate Judge Franklin L. Noel's October 5, 2016 order [Doc. No. 634] (“October 5 Order”) granting, in relevant part, Defendants' motion to compel compliance with an earlier order of the same judge, issued May 18, 2016 [Doc. No. 556] (“May 18 Order”). Luminara objects to the October 5 Order on the ground that its interpretation of the scope of the waiver of attorney-client privilege triggered by the testimony of a non-reporting expert witness is overly broad. (See Pl.'s Obj. [Doc. No. 658] at 3.) In contrast, Defendants agree with Judge Noel's scope-of-waiver ruling, but object to his decision to grant Luminara an additional twenty-one day period in which to decide whether to accept disclosure of privileged communications or withdraw its non-reporting expert and maintain the privilege. (See Defs.' Obj. [Doc. No. 659] at 2.) After careful review of the parties' briefing, relevant case law, and Magistrate Judge Noel's rulings, the Court overrules both objections and affirms the October 5, 2016 Order, subject to such modification as is described below.


         At the heart of this dispute is Luminara's decision to designate Doug Patton as a non-reporting, testifying expert witness pursuant to Rule 26(a)(2)(C) of the Federal Rules of Civil Procedure. (See Reid Decl. [Doc. No. 439], Ex. F.) Patton is a named inventor on five of the asserted patents underlying this action, and is one of the founding members of Luminara's predecessor-in-interest, Candella, LLC. (Pl.'s Obj. at 4.) He is also a paid consultant to Luminara, providing expertise ranging from design and development of new products to development of patent strategy. (Id.)

         Luminara first identified Patton as an individual “likely to have discoverable information” on December 31, 2014, in its Rule 26(a)(1)(A) disclosure. (See Reid Decl., Ex. C at 3.) Defendants responded by serving Patton with a document subpoena on January 23, 2015, and deposing Patton as a fact witness on October 29, 2015. (Defs.' Obj. at 3.) At the time, Luminara objected to every one of Defendants' document requests on privilege grounds, and repeatedly instructed Patton not to answer certain questions during his deposition. (Id.; Reid Decl., Ex. D.)

         On February 1, 2016, Luminara filed its Rule 26(a)(2)(C) disclosure, identifying Patton as a proposed non-reporting expert witness. (Reid Decl., Ex. F at 3.) Luminara indicated that Patton:

may provide testimony based on factual knowledge as well as testimony based on knowledge, skill, experience, training or education. Mr. Patton is expected to provide testimony at trial on the issues that he addressed at his deposition [and in] his declaration, including that Liown's moving flame candles infringe the licensed Disney patents, that embodiments described in Liown's '986 and '137 patents if made or sold in the U.S. would infringe the license[d] Disney patents, that the [sic] differences between the inventions claimed in the Disney patents-in-suit and flameless candles described in Disney's earlier-filed '455 patent, and Disney's and Candella's development of a flameless candle before Mike Li alleges he developed a flameless candle.

(Id.) (internal citation omitted). On the basis of this disclosure, Defendants moved the magistrate judge to require Patton to submit an expert report pursuant to Rule 26(a)(2)(B). (See generally Def.'s Mem. [Doc. No. 374].) The court rejected this request, finding that because Patton was not specially retained to provide expert testimony, but rather would testify on the basis of percipient knowledge, he was not subject to Rule 26(a)(2)(B). (February 25 Order [Doc. No. 388] at 6.)

         Defendants then moved for an order overruling Patton's privilege objections to his earlier discovery responses. (See Mot. to Strike [Doc. No. 436].) According to Defendants, by putting Patton forward as a non-reporting expert witness under Rule 26(a)(2)(C), Luminara waived the attorney-client privilege with regard to materials and communications provided to Patton in connection with his testimony. (See Defs.' Mem. in Supp. of Mot. to Strike [Doc. No. 438] at 11-14.) In contrast, Luminara argued that the 2010 amendments to the Federal Rules of Civil Procedure (“the 2010 amendments”)-which created the distinction between reporting and non-reporting expert witnesses-contemplated that the attorney-client privilege would be waived only in limited circumstances not existing in the present case. (See Pl.'s Mem in Opp. to Mot. to Strike [Doc. No. 495] at 14-15.)

         Ruling on the matter, Magistrate Judge Noel agreed with Defendants. (See May 18 Order at 10-12.) Looking first to the state of the law regarding expert testimony and waiver of privilege prior to the 2010 amendments, the magistrate judge noted that “courts generally held that all documents and information disclosed to any testifying expert in connection with his testimony, including any communications with attorneys, were discoverable by the opposing party.”[2] (Id. at 10 (citing In re Pioneer Hi-Bred Int'l, Inc., 238 F.3d 1370, 1375 (Fed. Cir. 2001); Johnson v. Gmeinder, 191 F.R.D. 638 (D. Kan. 2000)).)

         Magistrate Judge Noel then turned to consider whether the 2010 amendments had changed this rule. He first noted that while Rule 26(b)(4)(C) provides explicit protection for some communications between a party's attorney and reporting experts, [3] it is silent as to whether communications with a non-reporting expert are similarly protected. This omission-according to the magistrate judge-was not unintentional, however. (May 18 Order at 10-11.) Looking to the advisory committee notes for the 2010 amendments, he determined ultimately that they “did not change any existing precedent regarding privilege waiver of non-reporting experts that existed prior [to 2010].” (Id. at 11.) Because there was no dispute between the parties that prior to 2010 all documents and information considered by a testifying expert were subject to discovery, Magistrate Judge Noel concluded that “any documents and information considered by . . . Patton in connection with his expert testimony, including communications with attorneys are ...

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